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CARLISLE COMPANIES INC (CSL)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 revenue was $1.35B, up 1% YoY; adjusted EPS was $5.61. Operating margin compressed to 21.8% and adjusted EBITDA margin to 25.9% on CWT volume deleverage and input cost inflation .
  • CSL delivered an EPS and revenue beat versus S&P Global consensus: adjusted EPS $5.61 vs $5.36* and revenue $1.347B vs $1.318B*; 8 estimates for both metrics. The beat was driven by resilient CCM re-roofing demand and tight cost control amid new construction softness .
  • Management lowered FY25 guidance to flat revenue with adjusted EBITDA margins down ~250 bps vs 2024 and guided Q4 consolidated adjusted EBITDA margin to ~21%; CCM revenue down LSD YoY and CWT up LSD YoY in Q4 .
  • Capital allocation remained aggressive: $1.0B in new debt for flexibility, buyback target raised to $1.3B, and dividend increased 10% to $1.10/share, marking the 49th consecutive annual increase .
  • Narrative catalysts: temporary distribution-channel turbulence, destocking typical of seasonality, and continued raw material/tariff pressures; management emphasizes Vision 2030 execution and innovation pipeline momentum .

Estimates marked with * are values retrieved from S&P Global.

What Went Well and What Went Wrong

What Went Well

  • CCM resilience: adjusted EBITDA margin remained a robust 30.2% despite near-term order volatility; re-roofing—~70% of CCM commercial roofing—remained strong .
  • Shareholder returns and balance sheet: repurchased ~0.8M shares for $300M, raised the dividend 10% to $1.10/share, and issued $1.0B of debt to bolster flexibility; ~$1.1B cash and $1.0B revolver availability at quarter-end .
  • Innovation traction: RapidLock™, SeamShield™, APEEL™, VP Tech™, and UltraTouch® drove adoption aligned with energy efficiency and labor-saving trends. “Innovation is a critical pillar… we are seeing strong market adoption” — Chris Koch .

What Went Wrong

  • Margin compression: operating margin fell 190 bps YoY and adjusted EBITDA margin fell 170 bps YoY; CWT’s adjusted EBITDA margin dropped to 17.4% on volume deleverage .
  • Input inflation and tariffs: CCM faced materials inflation tied to ATO supply disruptions and anti-dumping duties on PCPP, impacting price/cost ($12M in Q3 raw material headwinds) .
  • Channel turbulence: consolidation and integration at a key distribution partner led to lost share in some areas; management expects resolution by 2026 but sees lingering Q4 effects .

Financial Results

Consolidated P&L and Margins (oldest → newest)

MetricQ1 2025Q2 2025Q3 2025
Revenue ($USD Millions)$1,095.8 $1,449.5 $1,346.9
Diluted EPS ($USD)$3.13 $5.87 $4.97
Adjusted EPS ($USD)$3.61 $6.27 $5.61
Operating Margin (%)16.8% 23.1% 21.8%
Adjusted EBITDA Margin (%)21.8% 26.9% 25.9%

Consensus vs Actual (Q3 2025)

MetricConsensus*Actual# of Estimates*
Revenue ($USD Millions)1,317.7*1,346.9 8*
Primary EPS ($USD)5.355*5.61 8*

Estimates marked with * are values retrieved from S&P Global.

Segment Performance (Revenue and Margins)

SegmentQ1 2025Q2 2025Q3 2025
CCM Revenue ($USD Millions)$798.5 $1,095.6 $1,000.8
CCM Adjusted EBITDA Margin (%)27.1% 31.6% 30.2%
CWT Revenue ($USD Millions)$297.3 $353.9 $346.1
CWT Adjusted EBITDA Margin (%)15.6% 19.9% 17.4%

KPIs

KPIQ1 2025Q2 2025Q3 2025
Operating Cash Flow (Cont. Ops, $USD Millions)$(1.4) $285.4 $426.2
Free Cash Flow (Cont. Ops, $USD Millions)$(30.4) $258.0 $392.7
Share Repurchases ($USD Millions)$400 $700 $300
Dividend per Share ($USD)$1.00 $1.00 $1.10
Cash & Equivalents ($USD Millions)$220.2 $68.4 $1,105.0
Long-term Debt ($USD Millions)$1,894.4 $1,895.8 $2,883.3

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Consolidated Revenue GrowthFY 2025Mid-single-digit increase (Q1) ; Low-single-digit increase (Q2) Flat YoY (Q3) Lowered
Adjusted EBITDA Margin vs 2024FY 2025~+50 bps expansion (Q1) ; down ~150 bps (Q2) down ~250 bps (Q3) Lowered
Consolidated RevenueQ4 2025N/ADown low-single-digits YoY New
Adjusted EBITDA MarginQ4 2025N/A~21% New
CCM RevenueQ4 2025N/ADown low-single-digits YoY New
CWT RevenueQ4 2025N/AUp low-single-digits YoY New
Share Repurchase TargetFY 2025$1.0B (raised in Q1) $1.3B (raised in Q3) Raised
DividendFY 2025$1.00/quarter (Q2 declared) $1.10/quarter (Q3 declared) Raised

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2)Current Period (Q3)Trend
Distribution channel & destockingInventory in channel lower than normal; expected LSD price increases starting Q2 (Q1) . Negative shift in distributor inventory “load-in” and softer sentiment (Q2) .Temporary turbulence post M&A at a key distributor; normal seasonal destocking; minor share loss likely to resolve by 2026 .Worsened in Q2; stabilizing but lingering into Q4.
Re-roofing demandCMS survey: re-roof volumes up LSD (Q1) .CCM re-roofing remains strong; ~70% of CCM commercial roofing revenue .Stable positive driver.
New constructionResidential volumes down LSD (Q1) ; deterioration in new construction drivers (Q2) .Continued softness in residential and non-residential new construction; affordability and higher rates persist .Persistently weak.
PricingExpected LSD price increases (Q1) ; limited traction on price increases (Q2) .CCM pricing flat; CWT pricing down <1% .Muted/slight pressure.
Raw materials/tariffsTariff impact minimal in Q2 expected (Q1) .$12M raw material headwind in Q3 at CCM (ATO, PCPP duties); MDI up YoY but flattish QoQ .Input pressure bias up.
Innovation & product pipelineInnovation accelerator and energy-efficient products (Q1) .Strong adoption of RapidLock™, SeamShield™, APEEL™, VP Tech™, UltraTouch® .Momentum building.

Management Commentary

  • “Revenue grew 1% year-over-year to $1.3 billion, and adjusted EPS was $5.61… We remain committed to our Vision 2030 strategy… and long-term financial targets” — Chris Koch .
  • “CCM continued to benefit from solid commercial re-roofing demand… Re-roofing demand remained healthy with stable contractor backlogs offsetting weaker new construction…” — Chris Koch .
  • “We repurchased 0.8 million shares for $300 million and raised our dividend by 10%, marking Carlisle’s 49th consecutive annual increase… increasing our share buyback target to $1.3 billion for the full year of 2025.” — Chris Koch .
  • “We are revising our 2025 full-year outlook to flat revenue year-over-year with adjusted EBITDA margin down 250 bps from 2024… still firmly in the mid-20s percent range.” — Chris Koch .

Q&A Highlights

  • Destocking and channel dynamics: Normal seasonal destocking; additional turbulence tied to distributor M&A integration; management expects resolution by 2026, with minor effects in Q3–Q4 .
  • Direct sales model: Industry already shifting to more direct sales; CSL mid-teens direct vs competitor ~30%; CSL prefers distribution but can flex with contractor preferences .
  • Segment margin outlook for Q4: CCM adjusted EBITDA margin guided ~26%; CWT margins down 250–300 bps YoY on lower organic volumes; pricing flat at CCM and down slightly at CWT .
  • Price/cost and raw materials: CCM pricing flat and raw material headwinds similar to Q3; MDI up YoY but flat QoQ; slight pricing pressure at CWT in underlayments and insulation .

Estimates Context

  • Q3 2025 adjusted EPS of $5.61 beat S&P Global Primary EPS consensus of $5.36*, with 8 estimates; Q3 revenue of $1.347B beat consensus of $1.318B*, with 8 estimates .
  • Given margin compression and revised FY25 guidance, near-term estimate revisions likely to move lower on margin assumptions (particularly at CWT) while holding CCM resilient given re-roofing strength .

Estimates marked with * are values retrieved from S&P Global.

Key Takeaways for Investors

  • Quality beat amid margin pressure: Strong CCM re-roofing and disciplined cost actions drove an EPS and revenue beat versus consensus*, but margins compressed on CWT deleverage and input costs .
  • Guidance reset creates bar-lowering setup: FY25 now flat revenue and margins down ~250 bps; Q4 margin guide ~21% provides near-term visibility and potential for upside if channel volatility abates .
  • CCM remains the engine: Sustained ~30% adj. EBITDA margin and ~70% re-roofing mix underpin earnings durability through cycles .
  • Watch CWT inflection: Headwinds persist, but acquisitions (Plasti-Fab, ThermaFoam, Bonded Logic) and retail expansion could support margin recovery as volumes normalize .
  • Capital allocation supports thesis: Buyback target raised to $1.3B, dividend up 10%, and $1.0B debt issuance increases optionality for M&A and innovation — an ongoing support for EPS and FCF compounding .
  • Near-term trading: Expect sensitivity to Q4 margin delivery and any signs of distributor normalization; monitor raw material/tariff inputs and pricing traction, particularly at CWT .
  • Medium-term: Innovation pipeline and cross-selling (e.g., Home Depot) plus structural re-roof demand and bolt-on M&A should sustain the path to Vision 2030 targets as macro and channel conditions stabilize .